Source
r/MilitaryFinance•
iprothree

Reservists, how do you adjust 401k contributions and TSP contributions?

Question

I'm attempting to figure out the best way to adjust and ensure I hit my contribution limit of $22.5k and originally I was planning on putting 92% of my drill and AT pay into TSP and max out the difference with my job's 401k but I realized I would probably go over if I screw up the calculations each month. Do other reservists max out the 401k and just keep the drill pay each month or mix and match it? Is there a way for the 401k plan coordinator to automatically adjust if I hit the limit for the year?

Posted Jun 3, 2023, 4:50 PM UTC

1217
themage201•

They need to allow us to contribute a flat rate. Adjusting the contribution percentage is just annoying.

29
H20_Is_Water•

This ^

2
Airbornequalified•

Check it every 2 months and adjust percentages. It’s difficult, especially since I do ot at my job as well, which affects it

10
LunaGuardian•

Since I'm on legacy retirement and don't get TSP matching, I don't put any in TSP and only use my civilian job's 401K. That way there's no risk of over-contributing since they will automatically stop at the limit.

If you're on BRS and get TSP matching then you'd definitely still want to claim that. In which case it doesn't really matter how much you put in each since you'd have to keep track of the combined limit anyway.

7
KCPilot17•

This is a problem for me that I can't really address until Nov/Dec each year. I work various days of the month for each, and there is no set number I can use. I just estimate at the beginning of the year, adjust about now in Jun/July, and then watch it closely towards the end of the year.

Both offer a match, so the minimum I put in for each throughout the year is the matching number. Last year I was under by $300, so didn't fully max it due to my math, but close enough for government work.

5
iprothreeOP•

Better under than over, you'd have to pay 10% penalty and taxes if you're over.

1
KCPilot17•

Na, you can fix it prior to the deadline. Just a lot more paperwork/headache.

5
piratearchaeologist•

Following

My friend is a cop and a reservist. We’re both E5s and on the legacy plan. He recently got me into putting 90% of my drill pay into the tsp. We likely won’t hit the cap since we’re E5s but I’ll be wondering this when I put in my officer package. I do the bare minimum as far as 401k contributions go (5% with matching). My advice would be to track your contributions monthly for both your TSP and civilian 401k. Any remaining money you have, set it aside for a Roth IRA. The max contributions are $6500 per person.

3
iprothreeOP•

I'm honestly debating just hitting TSP matching then using my civilian job to max out contributions. My AT days vary so I would have to adjust on the fly which would be annoying.

1
piratearchaeologist•

To each their own. It all depends on what your 401k has to offer. My civilian 401k is garbage so I’m choosing to max out the tsp instead, while I still can. I have about 12 years left before I can retire and I’m debating whether I want to rollover my tsp or just let it sit.

3
WSBpeon69420•

Jeeze what rank are you all that you will max out your tsp contributions with drill time?!

3
iprothreeOP•

not with drill time only but I put 92% of drill pay into TSP and try to max out the rest with work so I get matching from both as I don't really need drill pay.

2
WSBpeon69420•

Gotcha I didnt realize 401k and tsp were added to hit the limit I thought it was like tsp and Roth where you can max both

2
WSBpeon69420•

So what’s the question the ? Put as much as you can Into tsp and then as much as you can into 401k

1
IctrlPlanes•

I'm on the civilian side in the FAA so it may work a little differently for us but if we max out TSP before the end of the year we miss out on matching for the remaining pay checks because we are not contributing. We are able to put in a dollar amount to be contributed each pay check. This year $866 per biweekly paycheck maxes out TSP and maximizes our agency matching. The agency doesn't contribute $866. They will only contribute 5% divided by 26 pay periods and if you don't contribute in a given pay period you will only get the 1% not the other 4%.

In short if you do a lump sum and contribute $22,500 in 1 or 2 paychecks you are probably going to get screwed over on the military matching contributions.

2
iprothreeOP•

Yeah this is the main reason why I wanna try and adjust it so I don't max out early accidentally and having an auto set feature would've been nice but from what other people say I might just have to keep an eye on it towards the end of the year.

1
These_River1822•

What they are running is to is the max you can contribute to the TSP and their civilian job 401k is $22.5k, combined.

I don't think there is an easy way of doing it. As mentioned, monitor it a couple of time during the year and make minor adjustments so you come close but don't go over. Being sure to get the matching for both.

And if the civilian 401k has high fees, put more in the TSP.

1
the_falconator•

I have a 457b so it doesn't come from the same bucket as TSP, so I put 60% of drill pay in Roth TSP.

1